Try out our Premium Member services: Free for one month and pay only if you like it. The subject of 'Unfair Terms In Contract' has attained grave importance in recent times not only in relation to consumer contracts but also in regard to other contracts. Inthe rd Report of the Law Commission was submitted and it was suggested that a single section sec.
Consider the extent to which statutory controls on unfair contract terms foster genuine freedom of contract as opposed to promoting a protectionist strategy. In this essay, the author considers two diverging ideas regarding statutory controls on unfair contract terms.
Section 1 will address the idea that statutory controls on unfair contract terms foster genuine freedom of contract. In this section, the development of freedom from the 19th century to present shall be discussed, how it reached excessive heights causing exploitation and the implementation of statutory controls to overcome this.
Common law approaches will also be considered. Section 2 will subsequently look at how on the other hand however, these statutory controls promote a protectionist strategy.
Thus, focus will be on the key statutory controls that protect consumers and the common law approaches that coincide with these controls.
I shall investigate the concept of good faith and how this would impact the protectionist strategy. Furthermore, acknowledgement will be given to alternative proposals to replace protectionism, and in doing so I will look at criticism this strategy receives.
Finally, a conclusion will be provided, namely to decide which of these approaches is favourable. This allowed allocation of risk which provided the positive liberty of individualism but created the negative liberty of being free from obligation. This enabled freedom to reach excessive heights and cause undesirable effects.
Eventually a stricter system of standards was introduced by the Supply of Goods Implied Terms Act This Act moved away from 19th century provisions like the SGA which provided minimum shielding to consumers.
Within this Act there were provisions for both consumer contracts and business contracts. Its purpose served to accommodate a society which demanded a burgeoning industry in the direction of commercial and economic freedom.
The intentions of this Act were re-interpreted into the Unfair Contract Terms Act but with sole intention to protect consumers which placed limitations on freedom but did not strictly prohibit it. There are now higher standards imposed on businesses in relation to products and descriptions in the UCTAsection 6 and section This is justifiable because with businesses having superior bargaining power, combined with the fact that they are gaining commercial credit, makes their gain much greater.
The ECJ ruled that national courts cannot find the entirety of a contract unbinding on a consumer on the grounds of it being disadvantageous for them. If a contract contains unfair terms but can still remain in existence minus the unfair terms, the contract will remain binding upon both parties.
In Nicolene v Simmonds, a term that was meaningless and unimportant to the continuance of the contract was struck out. It illustrates minimal judicial intervention to change a contract; the key component of fostering genuine freedom.
A term cannot be unfair if it is not incorporated into the contract by the parties. In Christopher Hull Fine Art Ltd, it was held that the description of goods was not a term as there was no reliance on a description during the sale.
Again, this illustrates the courts unwillingness to vary contract terms because they prove unfavourable for a party. The application of these statutory controls illustrate that there is freedom of the formation of contracts and that commercial interests are not neglected in favour of consumer protection.
Despite appearing restrictive, it ensures both parties are entering into contracts voluntarily whilst neither party can avoid obligation, ensuring the entirety and purpose of contract terms cannot be removed.
However, freedom would be limited if this rule were to be applied stringently as contracts need to be interpreted individually to achieve the intended outcome of both parties.
Hence, for fear of dealing with a searcher and knowing their ability to recognise and challenge terms businesses would accommodate all consumers and meet required standards that are controlled by statute which would limit burdensome exclusion clauses whilst allowing for a competitive market for consumers to deal within.
The ECJ also recognise the fostering of freedom to contract in article 16 of the Fundamental Rights freedom to conduct business.
Europeanisation and materialisation are two key developments in the fostering of freedom to contract, which if continued would ensure harmonisation therefore maintain a degree of genuine freedom but without defeating the progression of consumer protection. This strategy will now be discussed.
However this extensive protection does face criticism as it needs to be appreciated that despite an unequal bargaining power, there is a common rationality amongst contracting adults. This would ensure almost boundless protection for consumers enabling them to be released from burdensome contracts.Hence, some terms can be found to be unfair under statutes such as the Unfair Contract Terms Act or the Unfair Terms in Consumer Contract Regulations and can be removed by the courts, with the administrative assistance of the Competition and Markets Authority.
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For example, UTCCR deals with onerous terms in consumer contracts, while these are beyond the remit of UCTA. Some contractual arrangements are within the scope of both UCTA and UTCCR, but are subject to different tests.
Week Exemption Clauses and Unfair Contract Terms: UCTA and UTCCR The future of regulation of unfair terms. BL – CONTRACT LAW ABS /12 Page 5 of 6 BL essay questions.
Students are required to answer a total of 3 examination questions. Commercial Law – This edition updated by Jonathan Fitchen Seventh edition published by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN Simultaneously published in the USA and Canada by Routledge Madison Avenue, New York, NY Routledge is an imprint of the Taylor & Francis Group, an informa business.
Ucta Law Essay. Topics: Contract C. THE UNFAIR CONTRACT TERMS ACT The basic purpose of UCTA is to restrict the extent to which liability in a contract can be excluded for breach of contract and negligence, largely by reference to a reasonableness requirement, but in some cases by a specific prohibition.